RESTRICTED C/w/40 GENERAL AGREEMENT ON ^ TARIFFS AND TRADE Limited Distribution

COUNCIL 2k May - 1

REVIEW OF THE TRADE RELATIONS BETWEEN YUGOSLAVIA AND CONTRACTING PARTIES SIGNATORIES TO THE DECLARATION OF 25

Proposed Procedures and Arrangements for the Third Review

1. Section C of the Declaration of 25 May 1959 on relations between contracting parties to the General Agreement and the Government of the Federal Peoples Republic of Yugoslavia provides that the CONTRACTING PARTIES should review each year "the development of mutual relations between Yugoslavia and other parties on the basis of this Declaration as well as the possibilities of further progress towards the full application of the provisions of the General Agreement".

2. In the course of the second review, completed at the nineteenth session in 1961, it was noted that, in accordance with the provisions of paragraph j5 of Part D of the Declaration of 25 May 1959, the CONTRACTING PARTIES would be required, in the course of the third annual review, to consider whether the present arrangement on relations between contracting parties and Yugoslavia should be terminated, modified or continued. The third review should, therefore, be more detailed than the previous ones, and more time should be allowed so that the important question of the future position of Yugoslavia in relation to GATT could be adequately examined. The CONTRACTING PARTIES accordingly instructed the Council to take up the matter well in advance of the twentieth session, at which the review would be concluded.

3. In the light of this, and in the light of past experience, it is suggested that the Council, at its present meeting, should appoint a working party to undertake this review. The Working Party should be convened to meet at rn appropriate time so that its report and recommendations would be ready for consideration at that session.

For convenience of reference, the terms of reference and membership of the Working Party conducting the second review is annexed hereto. c/w/4o Page 2 -, - 1M- '/'-.;'•' ".'••* .:>"'.. —' ^ ' —' .

4. As regards the scope of the review, it is suggested that the following subjects should be covered:

(I) Implementation of the present Declaration:

(a) changes and developments in the commercial policy of Yugoslavia;

(b) the extent to which contracting parties apply GATT to Yugoslavia;

(c) concrete and practical problems arising in trade with Yugoslavia.

(II) Future arrangements on relations between contracting parties and Yugoslavia (see paragraph 2 above).

5« If these suggestions are accepted by the Council, it may wish to instruct the secretariat to prepare, in consultation with the Government of Yugoslavia and with other contracting parties signatories to the Declaration, a background document to serve as a basis for the deliberations at the Working Party. c/wAo Page 3 ANNEX

TERMS OF REFERENCE MP MEMBERSHIP OF THE 1961 WORKING PARTY WHICH CONDUCTED THE SECOND REVIEW

Terns of Reference:

"To conduct the second annual review under Section C of the Declaration of 25 May 1959 on relations between contracting parties and Yugoslavia and to report to the CONTRACTING- PARTIES". Membership: Chairman Mr. S.V. Skak-Nielstn (Denmark) Australia Greece New Zealand Austria Sweden Brazil Turkey Canada Israel United Kingdom Czechoslovak .a Italy United States' Finland Uruguay France Kingdom of Yugoslavia Netherlands